Since I still live with my parents I've been saving money for a while. All these savings amount to around 15 months of my current salary.

Now I need a car.

Cars are pretty expensive. I don't want to buy a used car and be stuck with mechanical problems to be fixed every now and then. That costs money.

So I decided to go for a new car.

The car I want to buy would cost 75% of my current savings.

Would you purchase a car in that manner?

The other option is monthly installments which would lower my monthly savings to pay for the car loan.

What do you think would be money wise here?


  • My wage is around £800 and cars costing £800 where I live are just plain garbage (wires are hanging out and all) A decent cheap (likeable or not) car starts around £3000.. Those are actual numbers; I just used internet currency converter

  • It took 2 years to gather my savings

  • I don't think I'll be living with my parents in 5 years (maybe in 1 or 1 and half years moving out will become an idea to think about)

  • If I save money to the same rate till the end of this year, I will have enough savings to buy an economic house or enough down payment to buy for a midlevel standing apartment/house

  • Since it was asked several times in the comments, let me say that: I'm from Africa (West Africa). I was hopping more for common sense and money wise like answers. I got a lot more valuable answers/comments than I expected. You guys are awesome. It'll take me a little more time than I thought to read all these. Feel free though to take into account this location in you answers/comments

  • 131
    "I don't wanna buy a used car and be stuck with mechanical problems to be fixed every now and then. That costs money..." yeah but it costs a lot less money than a new car that will also have mechanical problems eventually...
    – D Stanley
    May 10, 2021 at 18:15
  • 58
    Paying from your savings is a very good idea. Paying this much of your savings on a car is very much not a good idea.
    – chepner
    May 10, 2021 at 18:15
  • 10
    Also, take a moment to think about how 2026-steve will feel about you spending that much money on a car today. You may think you have nothing better to do with the money, but he will probably think otherwise.
    – chepner
    May 10, 2021 at 18:35
  • 43
    "I don't want a used car" Why not buy a used car from a dealership with the benefits of a new car at less of a price? I've always (since my first new car) bought "New Used" - cars from the dealership, right off of lease and with all the insurance and warranties of a "new car". BRAND new car loses thousands in price when it drives off the lot... you can buy a leased 3 year old car for that thousands less and have all the benefits... Also, how much are you going to be driving? Lots? Little?
    – WernerCD
    May 11, 2021 at 5:22
  • 12
    @WernerCD hit it on the head. 2-3 year old cars hit a sweet spot of "almost indistinguishable from new" while also costing about 50% what their new counterparts cost. They rarely have any more problems than a new car, they often look and feel just like a new car, and you save a lot of money. This method also avoids having to deal with the major inconvenience of having things break and taking time off to fix them, which many proponents of 'buy a 15 year old car' often gloss over.
    – Nicholas
    May 11, 2021 at 17:14

13 Answers 13


If your current savings represents 15 months of salary and the car you are looking at purchasing costs 75% of your current savings, that means that buying a car that costs 11.25 months of your current salary. That is an insanely expensive car relative to your means. From a financial perspective, buying this car would be devastating. I would strongly suspect that you are discounting the cost of maintaining this new car and that you are inflating the cost of dealing with occasional mechanical problems with a decent used car that you can more comfortably afford.

Money wise, the best course of action would be to reconsider the plan. Buy a much (much) less expensive used car that you can much more comfortably afford. Deal with the occasional mechanical issue that will inevitably appear. Drive that car until the wheels fall off.

  • 64
    Drive it longer: wheels can be replaced :)
    – chepner
    May 10, 2021 at 18:00
  • 5
    @steve without knowing where you are in the world or what your salary actually is, that seems unlikely. Around here even at minimum wage with a full time job you'd be bringing home approx £1200 / month post-tax. A cheap used car can be had for less than half of that. Now I'm not saying this means it's sensible to buy the absolute cheapest car you can find, but it seems like you might be adding some extra constraints on your searching?
    – Vicky
    May 10, 2021 at 18:21
  • 40
    I love the utterly US/UK centric answers to this question. Oh you should get a car for 600 pounds. That is utterly impossible even for example in the Czech republic. Absolute minimum is about 1600 pounds and that's a car that will break down in months if not weeks. Not everywhere is the US/UK. And 1600 pounds is roughly 1.5x the MEDIAN monthly salary.
    – DRF
    May 11, 2021 at 7:11
  • 32
    Then the clear answer is... don't get the darned car. You have the luck to live in Europe with all this usable public transportation. Most of the time "I need a car" means "I haven't thought hard enough how to not need the car". Paying an entire year's salary to save a little bit of thinking...
    – obscurans
    May 11, 2021 at 8:10
  • 22
    @obscurans Another sweeping generalization. Not everybody lives in London, Paris or Berlin. People live outside urban areas, and based on the OP saying minimum wage is £80, he is most certainly not in the wealthy West, but in non-EU Eastern Europe. Ignoring that, people who must work late nights will also find public transit problematic, even in major cities.
    – user71659
    May 11, 2021 at 8:52

I just bought my daughter a car. A 2018 just coming off lease. 21,000 miles, and about half the price of the same car new. The money saved on insurance alone is significant. Her prior car was driven to 200,000 miles, and only the last 30,000 or so was heavy on repairs. In hindsight, we should have made the move at 150,000 or so. So her new car has about 80% of its life remaining and even some residual value after that.

  • 11
    Exactly this. You can pick up even a barely used car with a few hundred or few thousand miles on it for significantly cheaper than a new one. Speak to the dealer you want to purchase the new car from and they will gladly hook you up with a used one instead.
    – GamerGypps
    May 11, 2021 at 7:45
  • 2
    I bought a 4 yr old car with 95k for $7k, after 6 years I hit an expensive repair, and started looking to replace it, had 225k miles on it when I got rid of it. Went with another 3 year old 100k car for $9k, it's been 3 years and 50k miles, no issues at all. On the other hand I bought one that was a year old, 20k miles, and it had so many issues, I can only imagine how I would feel if I paid full price for that piece of junk. Had another bought new that the horn would start honking randomly for no reason even when parked in the garage, no one could fix it...got rid of it after 3 years.
    – rtaft
    May 11, 2021 at 12:29
  • 2
    I wish I was your daughter for this specific situation. You'd get me a good deal I bet. From where I live, 21000 miles (33000 Km) is considered a one year used car. Maybe 5% to 10% max less expensive than original cars....
    – Jason Krs
    May 11, 2021 at 23:10
  • @JasonKrs: That's because you're looking at the average. Some people drive a lot, others drive very little. I used to have a car to go to work that I drove for only 30km per day (over hilly terrain, too lazy to bike). When I sold it after 3 years, I hadn't reached 10K km yet. Those are rare cases, so they require research. How much time does it take you to earn 1K pounds? That's how much time you should be willing to invest in looking for saving up 1K pounds! May 12, 2021 at 14:26
  • 1
    @MatthieuM. I see. I made a little computation. I'd need around £8000 to get a decent used car from the brand dealer from where I'm from. TO save that much money at my current savings rate, it would take me 21 month (HAHAHAH).... I think I need to move to UK/US to have a decent car with my wage .... But I get your point. I should compute is the savings time suits me and go for it instead of burning all my current savings
    – Jason Krs
    May 12, 2021 at 14:47

Always pay cash. If you cannot afford a new car right away, buy a used one. If you cannot afford a used car, you are in no position to afford a car loan.

Whether 75% of your savings is too much, is depending on your cash flow. I am sure my first car (during university times) cost me more than 75% of savings. And after I started working, I got another car which again took most of my savings. But in both cases I had a good positive cash flow that was making up for this within less than a year.

  • 16
    This. Measure the savings not as a percentage of the total savings amount, but in terms of the length of time it's taken to get there. An amount which took nine months to accumulate is far more affordable than an amount which took nine years to accumulate. (Be sure to factor in running costs on the car you get: that will eat into the amount you used to save.) May 11, 2021 at 8:38
  • 2
    @AndrewLeach It took me 2 years to reach my current savings. Almost Half of my wage is going into the savings... So I understand this is a big NO GO then. Because maintenance expense may prevent getting back those 75% back in 2 years.... Plus I may not still live with my parents in 2 years
    – Jason Krs
    May 11, 2021 at 22:59
  • @Jason I'm in the UK and it's illegal for me to give personal financial advice. But if my comment, this answer and the similar top-voted answer give pause for thought, that's probably valuable. May 12, 2021 at 7:03
  • Does the rule "pay cash" still stand if lease is 0% loan - assuming you have cash to pay it all without getting any extra fees...
    – Kyslik
    May 12, 2021 at 7:51
  • 1
    Yes. The main reason for paying cash is not to avoid interest payments. It is to avoid overextending yourself financially by only spending money you actually have. 0% financing is popular because it gives the buyer the impression of getting something cheap and for a low monthl rate. People are much less inclined to pay 30k instead of 20k for a car than they are to pay 200/month more. The latter simply does not look that costly
    – Manziel
    May 12, 2021 at 8:03

It all depends on the interest rate being offered. You cannot make a generalization.

New car loans from the manufacturer are subvented. This is a major benefit to buying new. This means the manufacturer pays part of the financing cost out of its margins, in order to encourage sales of new cars.

I recently got a new car loan at "0%" APR. In reality, it was 0.9% because there's a cash rebate that I didn't receive.

I could have taken that money and deposited in a CD at the same company's finance arm and received 1.5% interest. That is, I could have been paid 0.6% to loan money to myself.

Obviously, I took the deal and kept the money in my existing investments, which easily realize 10x that, and I still have access to that money if an emergency occurs.

Additionally, for younger people, an installment loan on your credit record will greatly help you get a mortgage. (Credit scores for mortgages distinguish between long-term installment loans versus revolving credit cards)

The actual interest rate being offered depends on your creditworthiness and country. You need to determine what interest rate is being offered, and how that compares to alternatives including the benefits of having more rainy-day funds.

  • 2
    Given that a car loses at the very least 10% (a very conservative estimate, usually much more) in the first few months of owning it, that cheap credit turned out rather more expensive when compared to buying a used one year old car.
    – Voo
    May 11, 2021 at 13:48
  • 1
    @Voo Myth. I actually looked at Black Book values deciding on whether I needed gap insurance and found depreciation followed payments closely. Besides it’s irrelevant. I value my time more than the hassle of other peoples car problems, I have assets that are at risk in an accident to others, and I place a monetary value on my life that I am motivated to get the latest safety features.
    – user71659
    May 11, 2021 at 13:56
  • 2
    I bought a one year old skoda Octavia (aka the most popular car in Germany/Austria currently) last year from a dealer and the new one with the same equipment would've cost about 25% more (including the cash rebates and the usual tricks). I doubt you'll find any evidence that a one year old car is statistically more dangerous than a new one (if anything you find repairs/problems in the first few months are much higher than after that). Also if that were so important you'd have to replace your new car every year which I doubt you do either.
    – Voo
    May 11, 2021 at 15:15
  • (But if you can show me some actual examples of people selling a year old car for virtually the same price as new, I'd be very impressed.. also very interested because that seems like a great deal for me. Might depend on the country, but it's certainly not the case in the US or Austria).
    – Voo
    May 11, 2021 at 15:16
  • 1
    Depreciation is irrelevant to the question of getting a loan, so I believe user71659 is correct, with this answer. Assuming the price of the car is the same either way, and you are determined to buy it, then the choice is between paying up front and paying slightly more over time. There's absolutely no reason to pay $100 now if you could invest it for 5 years, grow it to $160, and pay $101 out of that (oversimplifying a bit). The only time it wouldn't pay off is during a major, market downturn.
    – Corrodias
    May 12, 2021 at 16:35

Yes, pay cash from savings to buy a car. 75% of your savings is probably fine, depending on your total savings and income level. This does not scale linearly, so concrete numbers would be helpful in better answering your question.

All cars have mechanical problems. Used cars probably have fewer than you think. New cars are a high price to pay to avoid them.

  • 7
    "75% of your savings is probably fine" the problem I have with that statement is the fact that if something goes wrong, can you afford a year of salary (roughly what he's made since it's 75% of 15 months of savings) for a replacement car? Seems a bit steep to pay THAT much for a car.
    – WernerCD
    May 11, 2021 at 5:30
  • 1
    If you buy your used car from a reputable dealer it will come with a guarantee.
    – RedSonja
    May 11, 2021 at 8:07
  • @RedSonja That's true. But from where I'm from, such cars only cost 5 to 15 % less than the original car. Might as well save a little more to simple buy a new car. I wish I lived in US/UK for this specific situation and get a decent car
    – Jason Krs
    May 12, 2021 at 11:24

With few exceptions, if you borrow money, you will pay interest. That means you are paying extra for that money. This interest makes whatever you buy significantly more expensive.

There are only 2 advantages to taking out a loan and not using the money you already have:

  1. You will have more money available for emergencies and the unexpected (and life rarely goes as planned).
  2. You will have the opportunity to invest the money. The only guaranteed investments earn almost zero interest right now, and all other investments carry significant risk of losing your principle.

Overall, I would recommend against taking out a loan.

Regarding the price of the vehicle, it would be ideal to spend less on the vehicle and save some of your money for emergencies, the unexpected, and charity. But, if you have no other significant expenses, and don't foresee any in the near future, spending 75% of your savings may be okay. Don't forget about taxes, maintenance, disposables (tyres aren't cheap!), insurance, and petrol. Plus, if you keep your job, you will have a steady source of income.

That said, buying a new vehicle is almost always a rip-off. As soon as you take it off the lot, most vehicles depreciate by 15-20%. That's money you just lost and can't get back.

Your best value will likely be to buy a vehicle a few years old that has already experienced that instant depreciation. With the money you save, you'll be able to afford a whole lot of maintenance, which may or may not be needed.

Is it a bit of a gamble? Yes. That's the downside. But if you pay an independent mechanic to inspect a used vehicle before purchase, you'll hopefully have a reasonable idea of its condition. Of course, the mechanic likely won't be looking inside the engine valves, so they won't be able to see everything.

Don't forget, new vehicles can often be a big headache too. For example, according to Toyota, the Toyota Prius is allowed to consume up to 1L of oil every 1000km (that's 1.1qt per 600 miles) before Toyota will even start to consider it a problem. The car dealership isn't going to tell you that sort of thing before you hand over your money.


As the new vs. old question is addressed well in other answers, I'd like to address the question of loan vs. cash.

Although taking out a loan costs additional money over the long run, there is a key advantage of a loan that has not been mentioned in other answers:

Regular payments on a car loan will build positive credit history. It sounds like you're pretty young, so this could have a significant impact when you're looking to make other big moves in your life like renting an apartment (landlords check credit history) or buy a house (better interest rate).

  • 7
    This answer appears to be quite US/UK-centric. In Germany and many other continental European countries, having had a car loan will have exactly zero impact on renting an apartment.
    – gerrit
    May 11, 2021 at 15:06
  • 3
    Never pay interest in order to save interest. There are free ways to build a credit history, if you are careful with your spending (put purchases on a credit card, even a prepaid card if necessary, and pay it off every month). May 11, 2021 at 18:16
  • I would argue that there's a significant time-management and attention-cost benefit to fixed payments that one can "set and forget."
    – jakebeal
    May 11, 2021 at 21:11
  • 1
    @gerrit even in the UK, credit score does not affect renting, only getting a mortgage
    – fqq
    May 12, 2021 at 1:36
  • 1
    @Grade'Eh'Bacon US-centric: The problem with that logic is that FICO distinguishes between revolving credit cards and installment loans (also prepaid cards have no impact... particularly since no SSN is given). A credit card lets you defer large chunks of payments, and you can adjust your spending if you lose your job, an installment loan does not. Without an installment loan, such as a car or student loan, on your record, you can find your FICO mortgage score to be a step lower than your general score. A subtended (subsidized interest) car loan is a cheap way to get installment experience.
    – user71659
    May 14, 2021 at 5:17

I wouldn't finance and pay interest if you don't have to.

In your position, something to consider, is a 2-4 year old car with an extended warranty. In general, I don't think extended warranties are worth it, but one scenario where I think they are worth it may apply to you:

If you are not considering purchasing a used car primarily because you don't want to deal with repair costs, and if an extended warranty enables you to consider it, then it may be cost effective to get the warranty, compared to purchasing new.

Note that you can be completely against extended warranties and it might still be rational to purchase one! The reason is to compensate for other irrational decisions which are more costly. This is not necessarily a bad thing either; car buying often entails irrational decisions. Home buying even more so! (I bought the specific car I bought because I wanted a manual transmission, and they are slim pickings these days.)

I have first hand experience purchasing an extended car warranty despite knowing it was probably irrational to do so. In 2019 my wife wanted to purchase a brand new vehicle that was $42K. She was burned in the past with many thousands of dollars of repairs on a vehicle, so I was able to convince her that we could buy a similar fully loaded 2016 model for $20K, but she wanted the extended warranty, so we added it for about $2K. Despite a potentially wasted $2K, from my point of view, we still saved $20K. (Caveat: if we change vehicles when the warranty ends the equity difference will be about $9K, meaning the true savings is closer to only $11K instead of $20K. Essentially we paid $2K to save $11K.) Within 6 months of purchase there was an issue that cost $1100 to fix, and our cost with the warranty was $100, so at this point the cost of the warranty was only $1000, though all that does is make me feel less worse about buying it. (As of now we paid $1K to save $11K.)

  • 1
    I think an extended warranty is worth it to avoid the nightmare scenario: you owe money on a car that's out of warranty. In that case, a major breakdown happens, and the collateral is now worthless. The choice is a) pay the major repair, or b) the lender calls the note and pay that. Realistically the borrower can't do either one, so repo, credit burn, no car, can't keep job, death spiral. The extended warranty saves you from that case, if it's any good. May 13, 2021 at 21:13

Buying used cars is more expensive in the long run, and you have the money to buy a new/barely used car

Edit (clarifying for the comment below): I'm all for buying cars with up to 10/15k miles already on them (and still has some factory warranty) that are a cheaper than a full priced new car, what I'm against is what the top answer is suggesting "Buy a MUCH (MUCH) cheaper used car and just deal with the mechanical issues"

Used cars are a crapshoot, and are never actually as cheap as people claim (some folks will tell you "Yea just pick up a used gem of a car for like $1,000 and drive it until it falls apart", terrible advice for many reasons). If you want to try your luck buying $3,000 used cars every couple of years like people here are suggesting it, go for it.

New cars have factory warranties so you're guaranteed to not have any problems (or at least not pay for ones you might have) and beyond the factory warranty if you drive it properly (dare I say gingerly), maintain it properly (oil changes, etc), and keep an eye out for any potential leaks/puddles under the chassis, it'll last a VERY long time.

It's similar to home buying vs. renting: If you don't have money for a down payment on a house, the obvious short term cheaper option is to rent, same as with cars: if you don't have cash for a new or slightly used car: buy cheap cars and pray like hell, but OP does have the cash. It's like OP is asking "I have $200k in savings, should I buy a house for $150k?" and people are telling him "No, that's too much of your savings, you should rent instead"

My opinion: use 50% of your savings on the car, borrow the rest, drive the car properly and keep up with maintenance. Barring the incredibly rare, new car automotive horror story, you'll have the car for a very long time. OR, since you're not really at risk of being homeless should you lose your job or hit financial hardship, buy the car outright using 75% of your savings... especially if you're planning on sticking around your parents place for a little longer, live frugally and save back up to where you're at now.

this is going to get downvoted because everyone here is answering from their own perspective: most likely they're adults, they have a home, possibly children, and other financial concerns, so to them, dropping "75% of their savings on a car" is a DRASTICALLY different thing than your own situation, but they don't see it, OP: get the car, treat it properly, you won't have to worry about cars for 20+ years, if you start playing musical chairs with used cars every couple years you'll wish you hadn't. If "buying a used car and driving it until the wheels fall off, or until you get sick of it breaking down" is the best idea, why does almost no one who is gainfully employed, with positive cash flow and savings do it (not to mention with more than enough savings to buy a new one outright)? I'd bet the authors of answers telling you to go the "purchase a used car and drive it until it dies" route are NOT doing that themselves, and have a car they purchased new, or they lease

  • 2
    There's a huge difference between buying a $1000 hooptie and fixing it all the time (not necessarily a negative) vs buying a solid used car for 25% to 50% less than a new vehicle. May 11, 2021 at 16:01
  • 3
    Almost all of my cars have been used, usually about 3 years old. I could have easily afforded new cars, but this plan is one of the reasons that I was able to retire at 60.
    – Mattman944
    May 11, 2021 at 16:57
  • 6
    I feel there is a flaw in logic here. Using your example, suppose a car has an average of a 20 year life expectancy. Then a 3-4 year old car has an average of a 16-17 year life expectancy. Since a 3-4 year old car is approximately half the cost of a new car, you absolutely would save money by buying a 3 year old car and keeping it for 17 years, vs paying double for a new car.
    – TTT
    May 11, 2021 at 18:06
  • 2
    @GlenRunciter Car != House. Cars (vintage classics excepted) almost always depreciate over time. Houses sometimes lose value, but in the long run, almost always appreciate over time.
    – shoover
    May 12, 2021 at 17:50
  • 4
    @JasonKrs That's why you have your mechanic check out the car before you purchase it. Any reasonable and reliable seller will allow this. If they don't, find another seller.
    – shoover
    May 12, 2021 at 17:51

Spending the bulk of your savings on a £3000 car is a bad idea. You'll need to have a lot of money back for repairs, because repairs are very expensive when you pay others to do them.

At that funding level, the only sustainable option is DIY car maintenance.

You are simply being unrealistic to think you can take an older car and dole money out-of-pocket for every car repair that comes up. What will more realistically happen is you will neglect the maintenance until a repair comes up that you simply cannot afford, and then you'll have to park it or give it up. Even if you borrow and strain to pay that repair bill, around the corner will be another one that will finish you off.

However, the tables turn if you cultivate the skills (and tools) to maintain the car yourself. Suddenly instead of a £400 brake job, you are spending £60 on the parts and £40 on tools (which you can keep and not have to buy a second time).

You put yourself at fullest advantage by buying a car that is a) popular, and b) dog simple. Make those your priorities instead of "style" or "features".

And the first priority there is to get a traditional stick-and-clutch manual transmission. Why? Unlike automatics, the transmission almost never fails (meaning, if yours does fail, you can easily get a used one off a wreck for £100). Usually the clutch fails, and a clutch change is well within the reach of an amateur.

Likewise, manual steering removes two high-maintenance items: the steering gear, and the belt driven hydraulic pump. Manual gear is simple.

I don't know the UK market too well, but just to give a world-relevant example, a Ford Focus might work.

One rule of thumb is the fewer things on the fan belt, the better. For instance my car does not have power steering, nor A/C, nor a smog air pump.

The complexity of the engine onboard computer is usually not a concern, since they are exceedingly reliable in most cars. Sensors and actuators are the least reliable part, but they're cheap; the only real danger zone is doing poor diagnosis and concluding the computer is at fault when it's actually a sensor. *In my experience computers rarely fail, but replacing the computer is an expensive way to reset the computer; so people see a notable improvement after doing so. Always ask: "which sensor could cause this?"

  • I'm not sure you got the numbers right. OP has 12000 pound in savings. If they spend 3000 on a car they have quite a bit left for repairs and also make a surplus on their wage at the moment anyway. The original question was about a more expensive car, around 9000 pound and for that it kinda fits or if we assume OP directly spends the other savings on something else. A decent used car's repair cost will typically not exceed their price in a year (or even multiple ones) - especially if one restricts oneself to necessary repairs (i.e. perhaps not the air conditioning). May 12, 2021 at 4:18
  • That being said, the DIY part obviously is a good option to save money on top - if one is up for it, otherwise one might also waste money in trying to fix something without success or in a way that creates even more damage... whether it fits for OP is obviously for them to decide. May 12, 2021 at 4:19
  • @Frank the way I read it was, "75% of savings = £3000" (therefore savings=3000/0.75 or 4000). May 12, 2021 at 18:10

Most of the answers are focused on the fact that in your situation you absolutely shouldn't be spending so much on a car (and they're for sure correct). But I just wanted to answer what I suspect was your intention in the question: "Should I pay in cash or pay in monthly installments"

and the answer is that it depends. Where I'm from it's very common for car purchases (at dealers, many 2nd hand cars/dealers won't have this option) to offer a interest free period (of typically several years). I would recommend this as you get a fair amount of profit by just safely investing the money for that period while paying the minimum repayments. Once the interest free period ends, pay off the remainder in it's entirety. Just make sure that you are allowed to pay it off completely and for no extra cost. Also be sure to not use the money for anything else and end up not being able to make a repayment on time. If you feel you can't do this then you should just pay in cash upfront, you never want to be paying interest when you have the cash. (unless you can use the money for something that will make you money, such as an appreciating asset or an investment, (this also applies if the car is being used to make money))

  • 1
    "you never want to be paying interest when you have the cash".... I see what you mean. I decided when reading some answers (including yours) and comments to not go for installments. Obviously, I think I should find the best way to spend less and spend cash and keep building the savings for goods that have more value in long terms (ex : house, investments, etc..)
    – Jason Krs
    May 13, 2021 at 18:30

Do not buy a car. See update below.

There are good answers already, let me add one that might seem tangential, but I feel is important, as it is very often ignored.

Do you need a car, or do you want a car?

  • if the answer contains ideas like "I would get to the job quicker", "there is often bad weather", "I have to be presentable at my job", "I need to visit x/y/z few times a year", "I need to transport furniture to my new apartment", "It is much easier", "everybody else my age has it" etc. then it is a want, not a need, and you should consider alternatives (like using bicycle or public transport - do some research there, it is often quite more usable than people think).
  • it the answer is more like "I'm starting a business which requires transporting hundreds of kg of stuff daily" or "I work night shifts and in my area there is >x% chance I'd get robbed/raped/killed" then it is probably a need. Still, moving to another location or changing business idea might change that need to "want".

Also note: You say you were saving for 15 months to save 4000 GBP. Note that once you get a car, it will take you much longer to save another 4000 GBP. And that you'd want another car in 10-20 years even if you buy new one. Many people don't realize until they do a detailed calculation that even if they were given a fuel for free, their car will cost them plenty (there is not only fuel cost, but also insurance, paying damages for incidents, possibility of damage and theft, yearly registration and technical checks, parking and other tickets, planed and unplanned maintenance and repairs, often overlooked and expensive amortization etc.)

Update: After your update (and comment indicating you really only want it instead of needing it), I would advice against buying any car at this time (and especially against buying new one for 3000 GBP!)

It seems you can currently save about 160 GBP/month without owning car and living with parents. I'd recommend to get a bicycle and/or use public transport. Get a taxi for those rare moments you miss a last public transport (and you didn't use bike).

You say you'd like to move to live on your own in few years - do a calculation - what is cost of rent in your area? How much are your parents covering (beside shelter) - food, clothing, hygiene, etc? Are those costs added much less than 160 GBP/month (and if so, how much less)? Even if they are only a fraction of that cost, You should still have a healthy stash before you decide to move out, as you will run into unexpected costs along the way.

Note that car (especially new one) is one of things that lose values very quickly - so you can't really go with "I'll buy it and see how it goes, and sell it if it is not working financially" - you'd easily lose 20-30% of the value the moment you buy it.

Car also has many hidden costs. Even after you buy it with cash, car standing and running costs in USA can easily be 400 GBP/month! Probably different in your area, but you should definitely invest some time to investigate local prices for all those components of car full cost, and calculate how much that car would REALLY cost you per month (Total cost of ownership)!

So - calculate cost of living alone, and calculate full cost of a car (not just a price of a car and gas!), and see if both of those combined are less than 160 GBP/month. If not, you will have to give up on one (or both) of your wants (either you will continue living with parents indefinitely, or you will not have a car) until you get a better paying job.

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    From what you said, I think I want a car. I but I would like to leave the office whenever I want at night as in public transportation, I may miss the last vehicle for instance. Sometimes, I just don't want to leave the office and do some personals stuff instead of wasting time in the INSANE traffic jam
    – Jason Krs
    May 13, 2021 at 18:25
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    @JasonKrs I've added an update to the answer. I do not think you should get a car as it is unlikely you can afford it - but please do calculations in your area using links I've provided. May 14, 2021 at 13:19

It’s hard to say as there are multiple factors you could look at.

The first is most people will assume paying cash is best since you won’t have to pay interest. Excellent point.

But if you get a very low-interest rate, you could probably finance the car and make more money by investing the cash instead of using it to pay for a car. That’s worth considering.

Here's my opinion:

A car is a depreciating asset which means its value is constantly dropping. So, paying cash for something that is losing money value means that you’re losing money in two directions which is not a good thing.

It only makes sense to start considering a car loan as an option when you have the cash available to pay for the car you want, but you feel like you can find a better use for that money that is worth paying the interest on the auto loan.

Evaluate the options in front of your basis and take an informed decision.

Good Luck!

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    Hello, your sentence about considering loan when cash is available is something I thought about... Very nice idea I think. Thank you sir
    – Jason Krs
    May 18, 2021 at 10:45

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